Biomass plant to close

Alexandria closure is hoped to be temporary

By DAVID CARKHUFF, LACONIA DAILY SUN

CONCORD — Indeck Energy's biomass plant in Alexandria will close April 30, affecting 16 employers and dozens of vendors and wood suppliers. But legislators hope to reverse one trend in energy markets in a bid to end the temporary closure.
Alexandria, a Lakes Region community of about 1,500 residents, is home to the 15-megawatt power plant fueled by biomass, the wood and organic material counted as a source of renewable energy.
"The decision to temporarily close was driven by revenue shortfalls created by the twin drivers of a really poor wholesale energy market and by low renewable energy credit market prices that really made operation of the plant economically unsustainable," said Richard J. Killion, managing partner with Elevare Communications of Concord, a marketing firm representing Indeck Energy.
Based in Buffalo Grove, Illinois, Indeck Energy reopened the plant at the end of 2008, Killion said. "It had been mothballed by a different company prior to that when its power contract was bought out," he said. News of the imminent closure of the Alexandria plant fueled concern, although Killion said Indeck "views it as a temporary closure."
"They see the tremendous value and the possibilities of that plant. The only thing that is really hamstringing Indeck from having sustainable operations is just the depth of the poor wholesale energy market and the low nature of the RECs (renewable energy certificates) right now," Killion said.
A hearing at 1:30 p.m. today, Tuesday, April 11, in Room 204 of the Legislative Office Building will focus on a possible remedy to the struggling biomass market. The state House Science, Technology, and Energy Committee will deliberate on Senate Bill 129, which would raise the reimbursement to biomass power producers.
The state's Renewable Portfolio Standard law requires New Hampshire electricity suppliers to purchase renewable energy certificates, or RECs, from eligible renewable power plants for a certain percentage of the power they supply to New Hampshire customers. "It also requires N.H. electricity suppliers to make a payment to the state, called the Alternative Compliance Payment (ACP), for each REC the utility fails to purchase," according to the New Hampshire Timberland Owners Association.
The bill, the New Hampshire Clean Energy Jobs and Opportunity Act of 2017, would increase the Class III Alternative Compliance Payment from $45/REC to $55/REC. "This will make New Hampshire's ACP values consistent with Connecticut and at a level that should produce REC values needed for biomass power plant continued operations," the association reported.
Killion said Indeck Energy supports the legislation.
"Unfortunately, It does not do anything about the low wholesale energy prices, the other driver impacting the decision to temporarily close the plant," he reported.
The New Hampshire Timberland Owners Association cited a study that found the direct economic effect of the state's six independent biomass electric power plants, as well as indirect effects on supply industries and "induced effect" in the service sector, accounted for 932 jobs and $50.9 million in payroll. The total economic output to the state's economy totaled $254.5 million each year, the association reported. The six biomass plants "contribute $7.3 million in tax revenues to state and local governments from all sources," the association reported.
In Belknap County, biomass production totaled 148,046 tons, and in Grafton County, where Alexandria is located, biomass production reached 199,985 tons, the association reported.
New Hampshire Department of Environmental Services also "supports the revision of the Class III Alternative Compliance Payment (ACP) to return the ACP to near its original value (reversing revisions made in 2011)," according to a Feb. 14 letter from DES to legislators.
Class III revenues decreased from $1,703,816 in 2014 to $174,240 in 2015 due to the reduction in the 2015 Class III REC requirement and the fact that the
New Hampshire Class III ACP rate in 2015 was closer to that of other New England states, according to the 2016 New Hampshire Renewable Energy Fund Annual Report.